DeWolfe: Recession Hammering MySpace's Growth

MySpace CEO Chris DeWolfe told a Reuters conference that following the worldwide financial crises, MySpace hasn't "really seen any impact, other than we think we could have grown even more than we have."

Translation: We've seen impact, but we're still growing--for now. Chris then goes on to set expectations very low:

"Our revenue and profits are significant and they continue to grow in spite of the poor economy. We're up 18 percent year-over-year as of last quarter and we're cautiously optimistic that we can continue to grow our business."

"Cautiously optimistic that we can continue to grow." That's a distinct change from prior expectations. And Chris's caution makes sense, based on what we're hearing elsewhere in the industry:

We hear that when advertisers cut their budgets under new constraints, the first thing to go is experimental social media.

Network of networks the Rubicon Project says social media ad spending dropped 3% for ad networks, 8% for young adults sites and almost 20% on entertainments 3. MySpace is all those kinds of sites in one.

MySpace also depends on display advertising, which we're pretty sure will decline in 2009.